My Thoughts on “The Interview with a Marked Man”

Until now, I have remained silent with my opinion on the heated discussions taking place on the blogosphere about Moneymechanics and Martin Horvath. After having interviewed Mr. Horvath I feel I am ready to disclose what I feel needs to be said in my humble opinion only. I’ve had a few email exchanges with Oren Gutman and Martin Horvath. They seem like pleasant enough guys. The website is put together nicely. But these alone are not reasons to deal with financial advisors / consultants / promoters. You have to dig a bit deeper.

To cut to the chase: there are just way too many red flags, some of which still need to be addressed.

No business address

MFDA lifetime ban

Claim on website: “There are such things as high yielding and safe investments.” (I don’t believe the market is 100% efficient, but I certainly don’t believe it is THAT inefficient.)

Information withheld on identity of creator and founder of the “up to 100% income tax reduction strategy”.

Information withheld on mechanics of warranty which guarantees against GAAR (General Anti-Avoidance Rule enactment by CRA).

Information on the source of money to fund claims on warranty not satisfactory. My question asked that if a claim was made against the validity of the strategy, then all investors would have a claim which would need to be funded. The warranty covers expenses of fighting claims, interest payments on loan, denied tax savings, etc. So if one claim is required, they are all required and the money required to satisfy claims of warranty holders would have to equal the premium for the warranty. Since this would negate any benefit of the strategy this wouldn’t work, but the cost of the warranty is relatively small. The answer provided indicated that the strategy facilitator would be responsible for handling the shortfall. This is an unacceptable, especially in light of the lack of information on the identity of the facilitator.

There currently is no opinion from CRA on the acceptance of the tax strategy.

There are more, but seven red flags are more than plenty. I’d like to know why the identity of the creator and founder of the strategy needs to kept secret. That’s a deal-breaker all on it’s own.

In any case they will not take responsibility for their actions and ultimately you will pay for their scams

MichaelAugust 17th, 2010 10:21 AM

I don’t expect WDAMMG to turn into the Better Business Bureau anytime soon, but I have to say I have really enjoyed this investigation into what appeared to be (and still appears to be) a questionable investment.

CRA will not provide an advance opinion on whether any tax reduction strategy is in accordance with the ITA. CRA’s preferred route is to reassess and take the matter to tax court. At least, that’s how CRA deals with Charity Tax Shelters.

Tom CAugust 23rd, 2010 05:12 PM

Yeah, I would say in these times of economic uncertainty, a certain degree of transparency would be required to at least take a glance at a financial product. With the red flags you noted, it wouldn’t even make sense to waste your time on this. Now, if these guys took action to remedy these glaring deficiencies, that might be a different story. But still, why wouldn’t they have acted transparently in the first place?